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Consultancies spurn lobbying register

The vast majority of Brussels-based consultancies are reluctant to sign up to the European Commission’s planned register of lobbyists if they are forced to disclose where their money comes from, European Commission Vice-President Siim Kallas has been told.

The European Public Affairs Consultancies Association (EPACA), which represents 38 consultancies including Burson-Marsteller, Blueprint Partners, Weber Shandwick and Edelman, has written to Kallas saying that the requirement to disclose what proportion of their income comes from particular clients would expose them to unfair competition from companies that did not join the register.

EPACA chairman José Lalloum said that legal advice his organisation had received said that it would be dangerous for members to register. “Those who sign up will be at a competitive disadvantage [to those who don’t],” he said, adding that it would put the nice guys in the profession in a difficult position .

EPACA’s lawyers said that the disclosure rules failed to respect the basic principle of free and fair competition enshrined in EU law and would lead to severe market distortion.

Lalloum questioned whether the Commission would achieve its goals of transparency by insisting on financial disclosure. “It might be counterproductive because it links money to influence. That’s a dangerous link to make,” he said.

The EPACA chairman said that consultancies would find it very difficult to put a precise figure on their earnings from each client. “No responsible company can just throw up a figure and say it’s an estimate,” he said. Consultancies would have to defend the figures they produced to shareholders and they would have to be audited,” he said.

The Commission is planning to set up a voluntary register from spring 2008 for all types of interest groups. It wants organisations which sign up to adopt a voluntary code of conduct as well as disclose the source of their funding. Consultancies and law firms would have to declare the turnover linked to lobbying EU institutions as well as the relative weight of clients in this turnover. In-house lobbyists and trade associations would have to provide an estimate of the cost of direct lobbying of the institutions while non-governmental organisations and think-tanks should state their overall budget and breakdown of the main sources of funding.

Commenting on EPACA’s position, Kallas, who is spearheading the transparency drive, said: “We looked carefully at this issue, and we see no legal obstacles whatsoever for lobbyists to register, with financial disclosure as proposed. If there is a will, there is a way for EPACA and its members to overcome any remaining concerns. “

A Commission official said that financial disclosure was a quid pro quo for the voluntary rules for interest groups.

Erik Wesselius of Corporate Europe Observatory which monitors corporate lobbying said: “It confirms our fears that for-profit lobbyists won’t comply whereas NGOs are prepared to give all financial details.” Lyn Trystman-Gray, president of the Society of European Affairs Professionals, said that the Commission should put the issue of financial disclosure to one side because it had not thought about the practicability of the rules.